Retail Supply Chain 2012: Globalization, Localization, and Cross-Channel

Supply chain may well be one of the least flexible functions of the retail business. Compared to an ad that can be dropped or a product that can be marked down or recalled, if supply chain isn’t functioning well, the process to fix it can be long and painful.

Unfortunately, retail supply chain’s history of evolutionary-style changes is running headlong into retail’s transformation under the pressures a global economy and cross-channel consumers. Between the three inter-related challenges of globalization, localized assortment, and cross-channel, retailers continue to grapple with supply chain basics while at the same time they must rapidly enable much more sophisticated supply chain capabilities than they have had to in the past.

How does all of this translate into supply chain opportunities and the investments that retailers are planning to make? Key findings from this report include:

  • Retail survey respondents continue to be challenged by consumers’ price sensitivity and unpredictable demand swings – their top two strategic business challenges around supply chain. But far fewer survey respondents recognized that some of these challenges are related to the increase in cross-channel shopping that makes prices and inventory availability more transparent.
  • A clear majority of survey respondents are either in the process of evaluating their supply network, just completed an evaluation, or are just about to start one – a recognition that the supply chain model of ten years ago is now inadequate to meet business needs.
  • Top supply chain technology adoption priorities for the next 12-18 months include: cross-channel inventory optimization, distributed order management, in-store wireless devices and applications, and integrated product catalog and product information management.

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